ASML changes its leadership: headquarters will move to France?Former CEO: Immersion DUV maintenance in China will be limited!

Xinzhixun

2024-04-26 21:42Posted on the official account of Beijing Xinzhixun

On April 24, local time, ASML, a major Dutch lithography machine manufacturer, announced at the annual general meeting of shareholders that the former CEO of ASML Peter Wennink (Wennink) and the former chief technology officer Martin van den Brink officially retired, and the former chief operating officer (COO) of ASML, Christophe Fouquet, a French national, officially became the new president and CEO of ASML.

△Christophe Fouquet

The reverie of the new French CEO: will the headquarters be moved to France?

Peter Wennink has been leading ASML since July 2013, leading the Dutch company to the top. Over the past 10 years, ASML has introduced state-of-the-art wafer fabrication equipment, and Peter Wennink has successfully established ASML as the world's leading supplier of semiconductor equipment.

Christophe Fouquet has been with ASML for 15 years, focusing on ASML's technologies, products and customers. Over the course of his career, he began his career in the DUV business, then led ASML's applications business and EUV (extreme ultraviolet) business, serving as Executive Vice President of EUV Technology, and became ASML's Chief Operating Officer in 2022.

Christophe Fouquet said: "I am very happy...... To be able to write a new chapter for ASML and continue to create tremendous value for our shareholders. ”

It should be pointed out that Christophe Fouquet is a Frenchman, so after he was nominated as the new CEO of ASML in December last year, when rumors broke that ASML was considering moving its headquarters out of the Netherlands due to "immigration policy issues", it was reported that he was associated with the new CEO of ASML, a French national, and thought that ASML would consider moving its headquarters to the Netherlands.

On the other hand, due to French President Emmanuel Macron's commitment to build a "more independent" France, some analysts believe that ASML's move of headquarters to France will help ASML get rid of the business damage caused by the trade restrictions imposed by the U.S. and Dutch governments on China. 、

The European technology media "Bits &Chips" commented that Christophe Fouquet's French nationality may be advantageous. While he may be at a disadvantage when dealing with Dutch politicians, "his French roots may be helpful in the international arena where the geopolitical storm continues to rage". "France represents a proud and confident Europe, so when it comes to curbing US interference, such as export measures, the new ASML CEO will always find the French president on his side. ”

But in reality, it is very unlikely that ASML will withdraw its headquarters from the Netherlands, and even if there is a possibility of withdrawing from the Netherlands, then it is even less likely to move to France.

First of all, ASML has been rooted in the Netherlands for decades from its birth to its growth, and it is not a simple matter to withdraw, nor is it something that a CEO who is a professional manager can decide and push to complete. Former CEO Peter Wennink has publicly complained about the "immigration policy", probably just to put pressure on the Dutch government to improve the "immigration policy".

Secondly, many of ASML's key technology R&D and core engineers are based in the Netherlands. Currently, ASML only has R&D centers in the Netherlands and the United States. What's more, ASML's equipment shipped around the world is unpacked and distributed to customers around the world after the final assembly test is completed at the factory in the Netherlands. At present, ASML does not have such a factory outside the Netherlands, and the senior engineers in the assembly and commissioning of the plant are all Dutch.

Third, although ASML's suppliers are all over the world, in the course of decades of development, there are also many local suppliers in the Netherlands around ASML, including some suppliers of key components. In contrast, France not only lacks a semiconductor ecosystem, but also has few suppliers for ASML, and even fewer relevant semiconductor talents. The first thing semiconductor manufacturers need to investigate when they build a factory in a place is the local semiconductor ecosystem, not to mention the relocation of their headquarters.

Moreover, if ASML does withdraw its headquarters from the Netherlands, then its relationship with the Dutch government will inevitably be stale, and the Dutch government will inevitably introduce relevant restrictions to restrict ASML from transferring some key assets, intellectual property and talents out of the Netherlands. This may not be worth the cost for ASML.

After-sales maintenance of immersion DUVs in China will be limited!

It is worth noting that, according to a Reuters report, Peter Wennink, the former CEO of ASML, revealed on April 24 local time that in some cases, the U.S. government will prevent ASML from providing after-sales service for some of its machines that it has previously sold to Chinese customers. This statement is very different from what Peter Wennink said at ASML's first-quarter earnings conference in mid-April.

It has been reported that the United States is pressuring the Dutch government to further restrict ASML's after-sales services to Chinese customers.

Alan Estevez, the U.S. Department of Commerce's undersecretary for industry and security, previously said: "We are working with our allies to determine what is important for services and what is not." We're pushing for no service on these critical components, so we're in discussions with allies. He added that the U.S. does not intend to restrict equipment suppliers from maintaining more peripheral components that Chinese companies can repair themselves.

For semiconductor equipment, the maintenance of the equipment is extremely important in order to continue to operate stably on the semiconductor manufacturing production line. If these devices leave after-sales maintenance, they may even have problems within a week. Similarly, some of the core components of the equipment need to be replaced regularly.

In response, Peter Wennink responded at ASML's Q1 earnings conference: "This is a discussion between the two governments, and we will provide input on the size and type of services, and I think all of this will be taken into account to finalize what the real problem is." I think that's something that governments need to discuss, because it's probably going to happen in the context of what they call national security interests. I think what we already have at the moment (conclusion) - there is nothing to prevent us from servicing the existing installed systems in China. ”

Peter Wennink's latest statement said, "We can provide services to them [Chinese customers], but we can't use U.S.-made parts and export-controlled parts from the U.S." ”

U.S. export control regulations cover parts of ASML's product line known as "immersion" deep ultraviolet (DUV) lithography equipment.

That said, the after-sales maintenance of the immersion DUV lithography machines sold and installed by ASML in China may be affected somewhat.

According to Xinzhixun, although ASML's immersion DUV lithography machine is currently a very mature equipment, the key DUV light source in addition to ASML's American subsidiary Cymer, Japan's GIGAPHOTON can also be supplied, so the maintenance and replacement of this DUV light source, if the Japanese government has no restrictions, can be solved. In addition, in terms of key lenses, it is mainly supplied by Zeiss in Germany, so this part of the maintenance and replacement can also be solved. However, there are still some parts that are only from the United States, such as the workpiece table and the laser parts that cooperate with the positioning and alignment of the workpiece table, which are purely American products.

Although ASML currently has a repair center in China, some parts can be repaired locally if they are broken. However, if it is not repaired and needs to be replaced, then as long as it is a restricted U.S.-sourced part, there is no other source of supply to replace it, which means that the damaged part cannot be replaced. The only feasible solution may be to disassemble the corresponding parts on some second-hand equipment to replace them. Of course, some manufacturers may have stockpiled some parts and spare parts in the past, but this is not a long-term solution.

According to ASML's financial report, in 2023, ASML's net sales will be 27.6 billion euros, of which 5.6 billion euros will come from installed equipment maintenance services, accounting for 20.29%. Chinese mainland accounted for about 29% of ASML's net system sales. If calculated according to this ratio, ASML's equipment maintenance service revenue from China in 2023 will be about 1.624 billion euros. However, the aftermarket maintenance service revenue of limited submerged DUV equipment may only account for a portion of the revenue.

Peter Wennink emphasized, "These [limits] only apply to a limited number of (DUV) systems. But we can install them. Any other system we sell, we can install and service. As a result, the restrictions "will not have a significant impact on ASML's financial position from 2025 to 2030 due to the limited number of Chinese factories affected."

Editor: Xinzhixun-Rogue Sword

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